Feds want $9.6M in restitution, but will Detroit ever see the money?

Oct. 10, 2013

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Detroit Free Press Staff Writer

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Former Detroit Mayor Kwame Kilpatrick / Ryan Garza/Detroit Free Press

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From behind bars, former Detroit Mayor Kwame Kilpatrick will have another legal issue to tussle with: a restitution tab of as much as $9.6 million.

That’s how much the federal government wants him and his contractor friend Bobby Ferguson to pay the city for what it called illegal proceeds from extortion schemes that it says landed Ferguson millions of dollars.

Judge Nancy Edmunds ultimately will decide the size of the tab. But it remains to be seen whether the government will ever see a dime of the restitution she orders.

Kilpatrick is serving a 28-year prison sentence. He can’t earn much behind bars. Plus, he says he’s broke — a claim that allowed him to receive a court-appointed attorney for the public corruption trial.

Prosecutors, though, often seek restitution from defendants in a variety of cases, including embezzlement, bank robbery and public corruption. The idea is that if the defendant comes into money down the road, such as an inheritance, or if hidden money is discovered, the government can grab it.

That’s already happened in this case with Ferguson, the government says.

Shortly after the jury convicted Ferguson and Kilpatrick, the government seized more than $400,000 in hidden assets that were discovered after the verdict. And in a court filing last week, prosecutors disclosed fresh allegations that Ferguson is still hiding assets and has been plotting from inside prison walls to keep the government from finding them. The government listened to prison phone calls between Ferguson and a girlfriend, whom he directed to go to Alabama to take money out of a safety deposit box for him, according to court records.

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The government already has seized more than $2.2 million from Ferguson. In March, Ferguson agreed to forfeit construction vehicles, nearly $500,000, a home on Bretton Drive in Rosedale Park and a condo at the Riverfront Towers.

The goal with restitution is to help the victims as they get on with their lives. In this case, the government says, that’s the city of Detroit.

“In a complex racketeering case involving a pay-to-play system of obtaining municipal contracts, as is the case here, some of those victimized also willingly participated in pay-to-play as a cost of doing business, thereby shutting out other contractors who did not want to participate in a tainted system like this,” prosecutors wrote in seeking restitution from Kilpatrick and Ferguson. “However, it is beyond question that the city of Detroit and its citizens were the clear-cut victims of the defendants’ crimes.”

But the defense has argued that there is no evidence that Ferguson made $9.6 million in profits, or that he ever shared any such money with Kilpatrick.

A restitution hearing will be held for Kilpatrick in the next 90 days.